November 22

11/22 - In Friday’s Cattle on Feed report, the USDA said feedlot inventories, at 11.95M head on Nov 1st, were down 0.2% from a year ago. New feedlot placements in October were 2.4% above 2020 levels. We are in the 3rd year of a liquidation and contraction cycle for cattle herds that is being compounded by poor pasture conditions. The beef cow herd is forecast to be down 1.4% on Jan 1st. Following a liquidation-driven rise in 2021, cattle slaughter is projected to fall from 2022 to 2025. Beef output will be negative year-over-year by the second half of 2022. In Nov’s WASDE, the USDA raised 2021 beef output from 2.4% to 2.6% above a year ago, mostly due to additional heifers in the 2021 slaughter mix, while projecting a 3.2% decline in 2022. Cattle futures at $133.53/cwt (11/19) are running 17.4% above a 5-year avg of $113.72. April 2022 futures are $141.30.